Darling could backtrack on capital gains

Chancellor Alistair Darling today defended the government's "controversial" plans to bring a single rate of capital gains tax into play, but also hinted at a possible U-turn.

Speaking at the annual Confederation of British Industry (CBI) conference this lunchtime, Darling said he was "open to suggestions" from business organisations on possible ammendments to his plans.

Last month, the chancellor outlined pre-budget proposals to axe taper relief on capital gains and instead impose a flat rate of 18 per cent.

He said today that it was "important" to have a tax system that was "competitive, fair and simple", but also acknowledged that his plans had not been without their critics.

"I know that my proposals to introduce a single rate of capital gains tax have been controversial. That was inevitable," said Darling.

But he told the CBI that he was listening to what business organisations, some of whom have lambasted the chancellor's tax plans, had to say.

Darling said that, given the current uncertainty within the global economy following the fallout from the US subprime crisis, "difficult decisions" lay ahead.

He also said the government would "continue to support" investment in intangible assets such as software and skills through tax credits.

Other highlights in the speech included Darling hinting that nuclear power was likely to be "part of the mix of future energy options".

He also said he had been right to throw a lifeline to Northern Rock by authorising the Bank of England to provide financial support.

Darling very briefly touched on the child data fiasco which saw some 25 million records lost last week.

He offered this piece of fuzzy logic: "It is a huge problem, but one that has to be dealt with. That is what government has to do in the face of problems like this. It is difficult but we have to get on with it and sort it out." ®